Bank of Hawaii — this is its main Honolulu branch — has been ranked the nation's top-performing bank. Its conservative loan policy is credited for that success.

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Forbes magazine has spotlighted Bank of Hawaii as the nation's top performing bank, while ranking Central Pacific Bank near the bottom of a list of 100 largest U.S. banks and thrifts.

Bank of Hawaii earned the honor by sticking to a conservative policy on loans at a time when many banks were lured into risky real estate deals by the promise of higher returns.

"Boring is good," said Al Landon, Bankoh's chief executive officer, in a Forbes article on the rankings, which will appear in the Jan. 18 edition of the magazine.

"Although we do not seek recognition, our employees and those we serve should take pride in the Bank of Hawaii financial performance, especially during a difficult economic environment," Landon said in a news release yesterday. "This recognition reflects positively on our bank, our community, and our employees."

The Forbes ranking is based on eight financial performance measures, which include: return on average equity, net interest margin, nonperforming loans as a percentage of loans, non-performing assets as a percentage of assets, reserves as a percentage of nonperforming loans, two capital ratios and leverage ratio.

The magazine looked at banks with at least $5.2 billion in assets.

Last year, the ABA Journal, the trade publication of the American Bankers Association, ranked Bank of Hawaii the top performing bank in the country for 2008 among banks with assets of $3 billion or more.

Forbes notes that Bank of Hawaii, the state's second-largest bank by assets, had a "starchy balance sheet" and that its focus on risk-adjusted performance added to its strength. It also notes that the bank's stock, trading recently at $48 a share, was 2 1/2 times its book value (total value of the company's assets that shareholders would theoretically receive if a company were liquidated). That was the highest ratio of any of the 100 banks analyzed.

At the other end of the spectrum is Central Pacific Bank, which Forbes includes in its worst banks section and ranks No. 92.

The Honolulu-based bank has been reeling from troubled loans to California homebuilders hard hit by the subprime lending meltdown and the price of its stock has fallen by about 75 percent in the past year.

The loan problem has led to huge quarterly losses at the bank, as well as played a role in it obtaining $135 million of Troubled Asset Relief Program funding.

Forbes' data show Central Pacific's nonperforming loans as a percentage of total loans was 12.1 percent.

That compared to Bank of Hawaii's ratio of 1.2 percent, which was eighth best among the banks reviewed.